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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?


To: Ichy Smith who wrote (5494)2/19/2007 9:29:21 PM
From: Wharf Rat  Read Replies (1) | Respond to of 24211
 
It isn't gridcrash that makes the lights go out
by Sharon Astyk

(Rat is wondering how come he knows so many people living a completly modern life style, including the net, while not being connected to the grid. She sez you can't do it; I guess she knows better than they do.)

There's been some interesting discussion since the revision of the Olduvai Hypothesis about gridcrash and blackouts as a likely indicator of infrastructure crisis. Personally, I don't really have a strong opinion about whether the grid as a single entity will live or die.

I do think that there are some compelling reasons to worry about the ability of the existing grid to satisfy the needs of a society that, because of oil and gas depletion and carbon reduction, is moving more and more of its energy burden to electricity. That is, many of the proposals to clean up carbon involve changing the source of energy away from oil to either nuclear energy or coal plants with scrubbers and sequestration (I will have more to say about the problems of carbon sequestration from coal plants in another post - I am less sanguine than many people that we can actually do this).

In many proposals we would begin powering our transportation with electric cars, buses and trains, replacing the heat we generate in our homes, schools, offices, etc... with oil and natural gas with electric heat, etc... While I have my doubts about whether we will ever do all of these things, if we did, it would certainly place enormous pressure on the grid, and require enormous investments in infrastructure. It is no big deal to recharge a few thousand electric cars - if everyone had one, this would be something of an issue. But regardless, I think it is also possible that we could accomplish this, or that we could fail to convert our infrastructure quickly enough (this is an enormous economic undertaking) thus not overburdening the grid. I officially take no strong position here.

But what I do have a strong opinion on (you knew there had to be something ;-), is this: I think most of us ought to be preparing for a life without electricity, regardless of whether we believe that peak oil may cause disruptions in the electrical grid.

I believe this for purely practical reasons. Peak oil, for most of us, will be less about geopolitics and large scale infrastructure crisis than it will be about what I call (riffing on Freud) ordinary human poverty. That is, we're going to be poorer, many of us much, much poorer. Even economists who dismiss peak oil acknowledge that significant oil shocks of any kind - caused either by depletion or by political crisis, would cause a major economic crisis. The things that many of us (by no means all) have been able to be certain of - a certain kind of stability and comfort, are going to go away. The economic problems created by oil and gas depletion are likely to create a serious, and deep economic crisis, much more serious than anything we've seen in my lifetime.

During the last depression, 29% of American schoolchildren suffered some form of malnutrition. Herbert Hoover famously said, "at least no one has starved" only to be caught out as cases of starvation appeared around the nation and mothers in cities rioted because they had nothing for their children to eat. The classic image of stockbrokers selling apples on the street and bread lines going around the block doesn't even quite convey how desperately poor many people were. It is not unlikely this view of our past is part of our future.

One of the useful things about having been crazily poor for some years during college and graduate school (living illegally in school buildings, apartments with no hot water, eviction notices, no phone, no power, etc...), which is not something I generally remember with fondness, is that it gives me some experience with what living poor is like.

And one of the things it is like is never being able to pay all your bills. So you play bill roulette. You pay the one with the most urgent exclamation points and potent threats first, and then you pay the next one. And you can go on like this for some time. But it is very hard to maintain when you don't have enough money to meet your basic expenses. And eventually, you get caught out - the check bounces, the next payment doesn't arrive in time, you have an unexpected crisis, or the bill collectors threaten you into paying out of order, and something happens.

This isn't just my experience - in the years I volunteered with various poverty abatement programs, I saw thousands of people in the same situation. And when you let one of the balls fall, the next step is to set you back even further. Because getting your vehicle back from the impound, or your phone turned back on, or contesting your eviction, or whatever is expensive. Those things cost money you don't have, and you end up further behind.

Peak oil will hit most of us where it hurts - in our jobs, our pocketbooks, in the homes where we won't be able to make the rent or mortgage payment, in our health because we'll no longer be able to afford routine care, in our choices - instead of "vacation fund or 401K, we'll be wondering "shoes or groceries." Add in that we can expect the price of electricity to rise - carbon sequestration is expensive, nuclear power is expensive initially and dealing with its wastes is very expensive, much of the easily accessible, cheap coal is gone, investment in renewables is not cheap either - we can expect the price of our electricity to rise steadily.

So whether or not we ever have rolling blackouts again or grid failure, lots of us will be having our power turned off. And since electricity for the most part runs luxury items (although we are not accustomed to thinking of them as luxuries) like refrigeration and lights, if it comes down to hard choices like "food or electric," "lights or medicine" we should all recognize that electricity is not essential to (most) human life, and prepare to function well and comfortably without it.

Now private renewable energy (and I do not mean pyramid scams, such as Citizens RE) is an option for some people. But the systems are expensive and somewhat complicated, and in the northern part of the country, we can expect periods where there isn't enough sun to run our solar systems. I am not trying to discourage anyone who can afford it from investing in renewable energy systems, in fact, quite the contrary. But the process of adapting our homes to operate on less is a large and expensive one. In a nation with a negative total savings rate, enormous quantites of mortgage and credit card debt, and a shaky currency, a lot of us, probably a majority, aren't going to be able to go solar, and probably shouldn't, because it really doesn't return the most bang for our bucks.

If you have $2000 to spend, you could choose between several things. For that money, you could add significant insulation to your leaky house, make or purchase insulating curtains for all windows, and buy four solar lanterns, a couple of battery powered lanterns, a solar battery charger and some rechargeable batteries. The rechargeable batteries and the lanterns would provide you with light and music for your existing CD player, and the insulation and curtains would provide a lifetime reduction in your heating and cooling needs. Or, for that same $2000, you could get a battery backup solar system that sat on your roof, and run four lights and a CD player. I know which one I would choose.

For those who are way ahead of the game, and already have their insulation and everything else they need, great, and if you have tens of thousands of dollars to spend on your house, you don't need my advice as to how to use it. But for the rest of us, solar panels on your roof or a wind generator in your yard is probably not the best use of your money (if you have the right spot for microhydro, you might have a better deal, and I'm envious). Because if you triage your life, and think about what is most important, it will be making sure you can live as comfortably as possible and as securely as possible, while, in hard times, needing to buy as few things as possible.

In addition, solar systems generally cannot heat houses, run conventional refrigerators (the kind they can run are usually well above $1000, and the cost of the system to run them is quite significant as well), run toasters, electric stoves or, except with the largest systems, air conditioning. So if you live beyond the gas lines, or, say have some reason to believe that natural gas might rise in price and drop in availability, you will still have many needs unmet, after you've invested thousands and thousands of dollars in your private RE system. That is, you'd have to buy the solar panels, and still buy the woodstove, the insulation, etc...

If you are like us, that's just out the question economically. We can't afford to preserve electricity at all costs when there are so many more urgent needs, and both household wind and household solar are not totally reliable where I live. We'd have to have non-electric backups for the times when the skies were cloudy or the wind wasn't blowing - or we'd need a generator, which is also pricey, depends on outside gas and produces a lot of carbon. We cannot afford to do both, and I think that's true of many or most people. There's also the issue of mobility - like it or not, in economic hard times some of us will lose our houses, or having family combine housing with them. It is not very hard to pick up your solar crank radio, or to pack your hand-washing machine. It is something of a bigger project to get the solar panels unwired from your house and moved.

For those of us who need the most bang for our buck, we need to prioritize. Electricity is nice - I'm very fond of it. But most of us should have homes that function well without it, just in case. And non-electric, human powered solutions, and stand-alone renewables (that is, things like solar calculators, solar battery chargers, solar radios, etc... that are cheap, last a long time and can serve many of the functions we normally rely on wall plugs for), are overwhelmingly more reliable, cheaper and more secure than dependency on the grid or on house-sized renewable energy systems.

In the cold climates, we need water, heat, light, a source of food and some way to prepare it, and toileting and washing facilities. A means of keeping food cool is helpful too, but a bucket of water taken from the ground and a mason jar will keep your dinner overnight. Laundry facilities would be great, but if you don't get to that, you can wash your clothes in a bucket and hang them on a $2 clothesline. If you are prepared to scavenge, can build a lot of stuff and don't require new things, all these needs can probably be fufilled for less than $2000. If you buy everything new, it might cost you four, depending on your circumstances. Even if you don't own your home, many of these items are usable in rental housing, and a landlord might well let you install, say, rainwater cachement onto existing drains.

In the West, water is a bigger issue. Most of the rest of us can capture rainwater, but horribly, in part of the west it is illegal to capture the rainwash off your roof. Very deep wells cannot be pumped manually. For you, solar direct pumps are probably the best option, or perhaps we will return to windmills. Changing the water laws so that you can collect your own rainwater would probably help.

In the hot states (an expanding number), cooling is a much bigger issue than heating. And while a lot can be done with good insulation, heavy curtains and shades, and a good solar attic fan, some people may still need air conditioning. In this case, if air conditioning is a life or death issue, house-attached solar might make sense. But for poor people, swamp coolers and battery powered fans, changes in lifestyle (do work in the early morning and evening), cool baths and showers and a change in pace will probably do it.

Our plan is to make our house functional and comfortable without electric power. That means a manual pump on our well, as well as (because I'm lazy and want water in my house) a cistern tank with a hand pump at my kitchen sink). We have two solar lanterns, two solar battery chargers, and a crank/solar radio for lighting and music (we consider music an essential). I can do my laundry in a bucket, but I'm coveting a James Handwasher and wringer - I'm hoping to add one this year. Refrigeration will be natural during the winter (we have an insulated area that stays plenty cold but does not freeze) and water based during the summer.

It will also mean changing the way we cook in warm weather, but that's no tragedy - the planet is full of people without fridges, and they created some of the best cuisines on earth without them. We have a wood cookstove and a regular woodstove, and plenty of warm clothes and blankets for the unheated sleeping areas. We had a homemade outdoor masonry oven, but we'll need to build a new one this year, which will be fun. I've got two homemade solar cookers, but am coveting a professionally made one, which will achieve higher temperatures. But I could get along with my homemade ones.

Our baling-wire and glue composting toilet set up is about to be replaced with something new and pretty, but the original worked fine, the bucket was free and the commode bought at a yard sale for $5. We buy sawdust now and again, but could use old leaves. We're reinsulating, which is not cheap, but we could, if necessary, just get used to the cold. It would not kill us. Homemade insulated curtains, tapestries or blankets hung over underinsulated walls, reusable bubble wrap on windows, even styrofoam insulation covered with bookshelves, and handmade draft dodgers would do the same job for much, much less money, as would moving more and faster and putting on more clothes. We should not confuse issues of comfort with issues of necessity.

My writing requires I have a computer. I could, if worst came to worst, write things out longhand or put them on the ancient typewriter I inherited, but I suspect we will purchase a stand-alone solar panel and a laptop for me eventually, assuming I ever get paid for doing this. But that, again, is a matter of convenience and having the money, not necessity.

Ultimately, we may turn the power off for other reasons than necessity. If our nation fails to cut its emissions, and our electricity is increasingly created by dirty coal, or by nuclear plants that endanger our communities, turning it all off may be the only possible way to avoid participating in the harm we're doing. It is important to me that I keep in mind that electricity for private homes (I am not speaking here about electricity for hospitals), is something that was not necessary through most of human history, and is not truly essential today.

Sharon

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

Broke up some of the large paragraphs to make it easier to read the essay online. -BA

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Original article available here.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
energybulletin.net



To: Ichy Smith who wrote (5494)2/22/2007 12:43:50 PM
From: Elmer Flugum  Read Replies (1) | Respond to of 24211
 
The dollar is losing popularity among emerging-market borrowers

economist.com

RAFAEL CORREA has brought a fresh face to Ecuador's presidency and some anachronistic habits to its treasury. Last week he quibbled over $135m of interest due on his country's foreign bonds, before coughing up at the last minute. Mr Correa thinks Ecuador's debt is partly “illegitimate” and lacks a whole-hearted commitment to repaying on time and in full.

This kind of inconstancy is, however, quite out of season among Ecuador's neighbours and peers. Emerging-market sovereigns are deemed safer than ever, judging by the prices that investors are willing to pay for their securities. For the past 15 years, the traditional gauge of that risk was the emerging-market bond index (EMBI), compiled by JPMorgan, which has tracked the price of dollar-denominated bonds ever since the international capital markets re-embraced emerging economies in the early 1990s. The global version of this index last month yielded just 1.67 percentage points over riskless American Treasuries, the thinnest spread ever. Mr Correa's shenanigans since then have barely caused a ripple.

Retirement, not delinquency, is a more fashionable fate for emerging-market bonds these days. Many governments have tried to buy back nearly all of their external debt in an effort to impress creditors and reach investment grade. Indeed, the stock of external debt is so low, and spreads so thin, that JPMorgan is losing faith in its own benchmark. Spreads on the global EMBI do not “reflect the dynamics currently at play in emerging markets,” the bank says.

The index's obsolescence reflects the decline in the dollar as the currency of emerging economies' borrowing. Dollar bonds now account for just 28% of their outstanding government debt. Securities issued in a country's own currency—pesos or zlotys, not dollars—are more worthy of investors' attention, JPMorgan says.

This is a welcome shift. After the Asian financial crisis, Barry Eichengreen of the University of California, Berkeley, and Ricardo Hausmann of Harvard University noted that crisis-hit emerging economies all suffered from the same “original sin”: their governments could not borrow in their own currency. No amount of good works could save them. Even governments with sound policies, such as Chile's, shared this problem. As a result, currency crises automatically became debt crises. When the local currency fell, the burden of the country's dollar-denominated debt rose, often to unsustainable levels.

But since then, emerging economies have been undergoing a sort of redemption. Buoyant global commodity prices and healthy manufacturing exports have given them a collective trade surplus. And while the dollar was regarded as a safe haven in the 1990s, pessimism about its future has increased investor demand for currencies considered to be undervalued. As a result, even Argentina, which is still wrangling with jilted bondholders in the courts over its 2001 default, is issuing new debt in pesos and finding ready takers.

But there is more to this transformation than a standard swing of the business cycle. Many countries now float their currencies to some degree, and most have abandoned the boom-time deficit spending that paved the way for subsequent defaults. And even though issuing dollar-denominated bonds is cheaper, numerous finance ministers appear to think the safety of borrowing in one's own currency is worth the cost. It is always reassuring to know you can print the money you owe.

In addition, the more sovereign—and corporate—debt that is issued in local currencies, the deeper and more resilient local capital markets become. Even governments running healthy budget surpluses are issuing new securities, in an effort to add liquidity to their financial systems. Their securities provide a benchmark for corporate bonds, allowing companies to borrow for longer periods. With currencies under better control, markets for derivatives and the securitisation of products like mortgages are also beginning to sprout. Eventually, the middle classes in these nations may enjoy the kind of access to credit that rich-country consumers now take for granted.

But despite the explosive growth projected for these capital markets, it is too early entirely to write off original sin or the EMBI. Analysts still value it, as a snapshot indicator of the risk of investing in these countries. And it might take only one rogue central banker to send lenders scurrying back to the dollar. “The ability to borrow in your own currency is a great convenience,” says Arijit Dutta, who covers emerging markets for Morningstar, an investment-research firm. “In the long term, it will be structural improvements that determine if they retain this privilege.” The redeemed can always relapse.